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Paul Reichmann: The genius who reshaped the world’s skylines

Paul Reichmann was among the greatest land developers in history, writes David Olive, and it’s unlikely our generation will see his like again.

Paul Reichmann was among the greatest land developers in history, a man who in a manner uncharacteristic for Canadians imagined urban landscapes on a grand scale, Star business columnist David Olive writes. (Tony Bock / Toronto Star file photo)

It is unlikely that those of my generation, raised in Toronto in the 1960s and 1970s, will see Reichmann’s like again. With uncommon audacity, persistence and real estate acumen, Reichmann reshaped the skylines of Toronto, New York and London.

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Reichmann is in the pantheon of the most extraordinary modern builders of urban landscapes, in company with master planners Georges-Eugène Haussmann (Paris), Robert Moses (New York state) and William Zeckendorf.

The brash Bill Zeckendorf, a New Yorker, somehow managed the feat of erecting Montreal’s inspiring Place Ville Marie as a collaboration between a Jew (himself); a tradition-bound Scottish skinflint lead tenant, James Muir, then-CEO of the Royal Bank of Canada; and a fiercely nationalistic Québécois mayor, Jean Drapeau.

That example is worth recounting given that the most unlikely and improbable circumstances lay behind Paul Reichmann’s signature achievements.

They include a cluster of a dozen or so his Olympia & York Developments Ltd. (O&Y) head offices in Don Mills, a harbinger of today’s commonplace suburban office parks; the twin towers of First Canadian Place, clad in white Quebec marble, in downtown Toronto; the World Financial Center complex in Manhattan; and the ensemble of state-of-the art office towers in London’s Canary Wharf district.

Toronto had a 45-foot (13.7-metre) height restriction on new-building construction in place when Reichmann erected First Canadian Place, then and now headquarters of the Bank of Montreal. At 72 storeys and 1,165 feet (355 metres), First Canadian was the tallest bank head-office tower in the world on its completion in 1975.

To win approval for the daring project on the former site of the Toronto Star Building at King and Bay Sts., Reichmann met with David Crombie, newly elected mayor of a reform council, at least 12 times. And the O&Y staff worked in tandem with city planners to reach a compromise pleasing to each party.

That model was replicated again in Lower Manhattan, where Reichmann won over civic officials by offering to develop the entire desolate Battery Park site and retire its mountain of debt. New York’s own locally prominent developers had each balked at taking the risk of building on more than a fraction of the site, much less occupying the desolate property with the four giant towers of O&Y’s World Financial Center.

That same accommodating spirit, at a time when developers tended to bully their projects to completion, later had Reichmann negotiating at length with then-British prime minister Margaret Thatcher. He needed from Thatcher an extension to the Underground that would make viable his seemingly pie-in-the-sky notion of erecting outsized head office towers for the world’s leading financial institutions. Once again, the site was a remote wasteland, known then as the Isle of Dogs and later as Canary Wharf.

In New York City and London, O&Y effectively relocated the financial districts of the world’s two financial capitals. New York’s money centre shifted from a rundown Wall Street district to O&Y’s World Financial Center on the Hudson River shoreline. And British bankers defected from a decrepit City in central London to a complex of O&Y buildings initially deemed too far away from downtown and too big for British sensibilities.

“Do they have to be quite so tall?” architecture critic Prince Charles asked Reichmann.

As well he might have, as the proposed Canary Wharf towers, which ended up soaring above the Thames as Reichmann intended, broke the informal rule that no building could exceed St. Paul’s Cathedral in height.

The attacks of Sept. 11, 2001, brought down the twin towers of the World Trade Center, of course. But O&Y’s neighbouring World Financial Center’s four towers, headquarters for Merrill Lynch & Co., American Express Co. and the Wall Street Journal, among other prestigious tenants, survived with minimal damage. That was due to advanced building techniques that were an O&Y hallmark, and the alacrity of current WTC owner Brookfield Properties of Toronto in rapidly restoring one of the most valuable pieces of real estate in the world, now the most prominent feature of the Lower Manhattan skyline.

Vos Iz Neias, the New York-based global news blog for Orthodox Jews, missed the point Oct. 25 with its headline, “Paul Reichmann, Considered to Be One of the World’s Richest, Passes Away.”

The Reichmann family, of course, lost most of its immense fortune when its principal enterprise, O&Y — world-renowned among architects, rival developers, bankers, city planners and engineers — collapsed into bankruptcy in 1992. The privately held O&Y was the last to succumb in a North American recession that took down every major publicly traded land developer on the continent.

Paul Reichmann was not particularly comfortable with riches. The Reichmanns seemed anxious to shed personal wealth. They were large-scale donors to the Sunnybrook Health Sciences Centre and other non-denominational hospitals, as well as Jewish medical facilities, yeshivas and synagogues.

In an interview with me in the late 1980s, Paul Reichmann invoked Maimonides’ preference that his students devote themselves to intellectual rather than commercial pursuits. There are enough crazies out there, the philosopher said, to tend to the material world. A bit sheepishly, Reichmann said, “I’m probably one of the crazies.”

The low-key Reichmanns were for decades mistakenly identified in the press as three mysterious brothers who had placed a most unpromising bet on the forlorn countryside of Don Mills Rd. and Eglinton Ave. E., and had won. With its cluster of a dozen or so head-office buildings at that crossroads, O&Y broke into the big time. Its buildings shifted previously downtown business activity to what were then the wilds of North York.

In fact, Paul entirely overshadowed his two brothers. Paul alone was the high-stakes gambler with a Cray supercomputer for a brain. What drove him was a desire to succeed, on a grand scale, where others had failed or, more often, had not tried.

Like Warren Buffett, Reichmann could make exceeding complex computations in his head. A slight change in variables — an uptick in immigration, a 0.3-per-cent easing of interest rates, a logistics advance that had pallets of drywall arriving at work sites with 4-per-cent larger loads — altered revenue streams to a degree that Reichmann grasped without benefit of a calculator, pen or paper.

Reichmann knew, for instance, the exact premium O&Y could charge tenants if Edward Durrell Stone — one of the invariably prestigious architects recruited by O&Y — could be persuaded to design First Canadian Place with vast expanses of space unobstructed by pillars; to indent the tower’s four edges to create an unprecedented eight corner offices per floor; and to install unusual double-decker elevator cars to hasten vertical commutes.

By the mid-1980s, O&Y’s burgeoning portfolio of prime office space in North America’s leading cities was throwing off a Niagara of cash flow. That prompted Reichmann to stray into unwise investments in oil and gas, financial services and even liquor (Hiram Walker Inc., maker of Canadian Club whisky).

These were businesses beyond Reichmann’s ken. However, the torrent of rental income had to be reinvested somewhere, and there simply weren’t enough skyline-altering projects to consume all that cash at any given time.

In the end, O&Y had the opposite problem, a crippling shortage of cash flow triggered by a 1990-92 recession that inflicted its most severe damage on real estate valuations and rental rates.

O&Y’s notorious secrecy backfired on a company that had always refused to show its books even to lead banker Canadian Imperial Bank of Commerce. In an epic blunder in the annals of Canadian banking, CIBC was as surprised as the 91 other world banks for which it was the lead on the O&Y account when it discovered, too late, that O&Y’s sudden drought of rental income rendered O&Y incapable of meeting its debt obligations.

For a time after the bankruptcy, two of Reichmann’s nephews carried on with a comparatively modest property management business, but eventually they dropped from sight. Reichmann himself staged something of a recovery, buying back a portion of Canary Wharf from O&Y’s creditors. But he too faded from view in relocating to his project in Mexico City to build Latin America’s tallest office tower.

As one would imagine, adjusting to his humbled circumstances was at times excruciating for Reichmann. After decades of turning dirt and money into landmark buildings, he no longer had the power and influence to, for instance, lure the acclaimed Cesar Pelli from his post as head of the Yale University architecture school to design O&Y’s World Trade Center.

“Today,” Reichmann said in the mid-1990s, “if I visit one of my former buildings and the elevator is not working I feel my blood pressure rise until I remember I have nothing to do with this property anymore.”

The splendour of Daniel Burnham’s magnificent World’s Columbian Exposition of 1893 survives only in photographs, though it established Chicago as America’s capital of architectural innovation. For me, at least, the O&Y bankruptcy is almost a non-event, because the O&Y buildings and the big thinking behind them — a virtue not always credited to Canadians — remain and are busily useful.

And that was the point.

Cesar Pelli’s playful cone- and pyramid-shaped hats on his four World Financial Center buildings are prominent in most postcard depictions of Gotham. And bowler-hatted London bankers now take the Underground’s Jubilee line — whose drawn-out construction helped tip O&Y into the abyss — to a Canary Wharf so popular that several more head-office buildings have been added to the campus since 1992.

The centrepiece of the sprawling Thames-side development, however, is still the 50-storey One Canada Square.

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